Lemme do some quick back of the envelope math about wages.

On a busy day at the pizza place, we'd have the following crew:

Drivers: $2/hr Tip Wage - 44 man-hours
Insiders: $8/hr - 20 man-hours
Managers: $12/hr - 22 man-hours

For a total of ~$512. Aiming for ~15-20% of sales. /

That works out to ~17% on a ~$3000 night, so that's bang-on target.

Let's say we raised everybody there to a $15/hr wage.

We'd end up adding $778 to labor for the day.

More than doubling! That sure sounds like a lot!

But hang on a second.
Let's assume for easy math that what we're selling is $10 one-topping large pizzas.

For 3k, we're selling 300. We've got to divide up that 778 between the pizzas.

That raises the price of each pizza from $10 to $12.59.

"That's... well, not huge, but it's still more money!"
Definitely! But, here's something important.

The price of a pizza has actually gone down.
Remember, money isn't real! It's a representation of the time worked.

The vast majority of the people we had been selling that pizza to weren't making $15 an hour before. We were in a college town, that manager wage of $12/hour was a /good/ wage. WE were buying that pizza.
So, in terms of value:

The cost of the pizza is lower for a driver.

The driver was probably, with tips, making 10-15/hour, but that depends on how good the night is - some nights, it might not be minimum wage.

So, $7-15/hour. The pizza costs probably more than an hour of work.
Now, if they're making 15, it costs 50 minutes of work. Reliably.

Likewise, for the manager, 50 minutes of labor. It's a few seconds more expensive now, but it's still right about ~83% of an hour.
For the insider, the cost of that pizza went from 75 minutes worth of labor, to 50 minutes of labor. It's 33% cheaper.
There are some externalities - the price of the things we use to make the pizza will go up a bit, but not by much; farms are efficient as fuck, and farm workers process a truly staggering amount of ingredients per hour. It's ameliorated.
The workers are making substantially more money. Their lives are better. They're happier.

And all for an extra $2.59 per pizza, if the only place we're shunting this cost is direct to the customer.

If we get rid of tips? 20% was pretty standard. So now, it's only .59 more.
And now, those workers with more money - they're not putting it into savings accounts. They're buying the things they've just been making do without. Repairing their cars. Buying shit for their leisure time. Hell, FOOD - I /never/ went out to eat when I was working restaurants.
I couldn't justify it! I couldn't afford to!

Hey look at that. More sales.

More from Finance

Ok here is the explanation. Grab a cup of coffee and read on. If you have not read/noticed this, you will see intraday options movement in a new light.


Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points

To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs

Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM

Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk

You May Also Like

I just finished Eric Adler's The Battle of the Classics, and wanted to say something about Joel Christiansen's review linked below. I am not sure what motivates the review (I speculate a bit below), but it gives a very misleading impression of the book. 1/x


The meat of the criticism is that the history Adler gives is insufficiently critical. Adler describes a few figures who had a great influence on how the modern US university was formed. It's certainly critical: it focuses on the social Darwinism of these figures. 2/x

Other insinuations and suggestions in the review seem wildly off the mark, distorted, or inappropriate-- for example, that the book is clickbaity (it is scholarly) or conservative (hardly) or connected to the events at the Capitol (give me a break). 3/x

The core question: in what sense is classics inherently racist? Classics is old. On Adler's account, it begins in ancient Rome and is revived in the Renaissance. Slavery (Christiansen's primary concern) is also very old. Let's say classics is an education for slaveowners. 4/x

It's worth remembering that literacy itself is elite throughout most of this history. Literacy is, then, also the education of slaveowners. We can honor oral and musical traditions without denying that literacy is, generally, good. 5/x